Sudhir Kumar Jha @ Sudheer Kumar Jha vs. The State Of Bihar

Facts

The petitioner, Sudhir Kumar Jha, challenged a show cause notice dated December 11, 2020, issued by the Deputy Commissioner of State Tax, Patna South Circle, Patna. The notice granted only 12 days, until December 23, 2020, for the petitioner to submit a reply. This was alleged to be in violation of Section 74(8) of the Bihar Goods and Services Tax Act, 2017, which mandates a 30-day period for response. The petitioner also challenged the consequential final order dated January 23, 2021, passed by the Deputy Commissioner, State Taxes, Patna Central Circle, Patna, which imposed tax, interest, and penalty for the period October 2019 to March 2020. This order was also alleged to be in violation of natural justice and Section 74(8) of the BGST Act, 2017, as it was passed based on the insufficient notice period. A demand of Rs. 3,17,968 in DRC-07 dated January 23, 2021, based on this order, was also challenged.

Held

The Court held that the minimum statutory period of 30 days mandated under Section 74(8) of the CGST/BGST Act, 2017, was not afforded to the petitioner for making a payment or filing a reply. The assessing officer proceeded to pass an ex parte order before the expiry of the mandatory 30-day period. The notice dated December 11, 2020, directed the petitioner to file a reply by December 23, 2020, which was within the 30-day period but did not grant the full 30 days as required by law. The Court found that the mandate of law requiring 30 days' period was not fulfilled in this case. Therefore, solely on this ground, the Court quashed the show cause notice dated December 11, 2020, and the order of assessment dated January 23, 2021. The Court directed the assessing officer to issue a fresh notice in light of the statutory provisions and pass an appropriate order in accordance with the law. All proceedings were to be positively complied with. The petitioner undertook to cooperate fully.

Key Issues

1. Whether the show cause notice dated 11.12.2020, issued by the Deputy Commissioner of State Tax, Patna South Circle, Patna, granting only 12 days for reply, is in gross violation of Section 74(8) of the Bihar Goods and Services Tax Act, 2017, which mandates a 30-day period for response? 2. Whether the consequential final order dated 23.01.2021, passed by the Deputy Commissioner, State Taxes, Patna Central Circle, Patna, imposing tax, interest, and penalty, is vitiated by a violation of the principle of natural justice and Section 74(8) of the BGST Act, 2017, due to the insufficient notice period? Petitioner's Arguments: The petitioner argued that the show cause notice dated 11.12.2020, which provided only 12 days (until 23.12.2020) for submission of a reply, was a gross violation of Section 74(8) of the BGST Act, 2017. They contended that 30 days' notice is a mandatory requirement of law, citing a previous judgment of the High Court in CWJC No.3374/2021 concerning Section 73 of the BGST Act, 2017. Consequently, the final order and demand based on this insufficient notice were also challenged as being in violation of natural justice. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents (State of Bihar and its tax authorities).